Autumn Statement – fuel duty comment05 Dec 2012

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Drivers saved from £1 billion fuel duty payments

The Chancellor has announced that the 3p (+VAT) rise in fuel duty planned for January has been cancelled with the next scheduled rise now due in September 2013. In his Autumn Statement George Osborne said:

“The Government will provide further support to businesses and motorists by cancelling the 3.02 pence per litre fuel duty increase that was planned for 1 January 2013. The 2013-14 increase will be deferred to 1 September 2013. This will mean that fuel duty will have been frozen for nearly two and a half years. For the remainder of the Parliament, subsequent increases will take effect on 1 September each year, instead of 1 April.”

Commenting on the announcement, Professor Stephen Glaister, director of the RAC Foundation said:

“Yesterday an official report showed transport was the biggest area of household expenditure bar none, with fuel costs a big and rising part of that. Today it is a relief to see the Chancellor has read it and acted on it.

“Britain’s 35 million motorists each average about 7,000 miles a year. Cancelling this rise will save them a combined total of more than a £1 billion annually, money which they can use to ease their financial headaches and help support the economy through their own spending.

“It’s not as if drivers aren’t already paying a huge amount in tax. Even without an increase 60% of the pump price goes to the Exchequer.”

(Notes: the 7,000 miles per driver is derived from the latest annual car traffic figure of 244 billion miles)

Fuel facts:

Price per litre today

(Record price reached on 16th April 2012)

Cost today of filling average car with

50 litre tank

What a litre of fuel would have cost with 3p (+VAT) rise in fuel duty

What cost of filling average car with 50 litre tank would have been if 3p (+VAT) added to fuel duty.

Annual saving for driver doing average 7,000 miles per year (@40mpg)

Diesel

141.07p (148.04p)

£70.53

144.67p

£72.33

£29

Petrol

133.13p (142.17p)

£66.56

136.73p

£68.36

£29

85% of adults in rural areas have a driving licence – compared to the GB average of 72%.

91% of rural households own a car – compared to the GB average of 75%.

Car use per person in rural areas is about 60% more than the GB average.